unit 15 osborne book

i am having problems with 3.3 on p81. how to forecast the cash sales. thanks


  • Rinske
    Rinske Registered Posts: 2,453
    Hi Meibaker,

    Based on the moving averages calculated in a you can see that the sales go up with £ 5 each day. The seasonal variations can be calculated based on that too. Based on those figures you can calculate the new figures for week 4.

    There is a short explanation of how to calculate it in the time series analysis on page 68-71 including the formula of y = mx + c.

    The workings for this one work out for me as:

    The moving averages are calculated on a five point moving average, that means the first one we can calculate is the Thursday in week 1.
    Thursday is 915 (Tue wk1) + 960 (Wed wk1) + 1040 (Thu wk1) + 1080 (Fri wk1) + 1080 (Sat wk1) / 5 = 1015

    Then the next is Friday in week 1. The same principle applies. You pick the Wed wk 1, Thu wk1, Fri wk 1, Sat wk 1 and Tue wk 2 (1040 + 1080 +1080 +940 +985) divide it by 5 and this comes to 1020.

    This just moves on one day at the time and you keep dropping the last day and adding a new one, till you run out of groups of 5, which is at the Wednesday in week 3.

    Now if you put them all underneath each other, you can see that this moves up 5 every day.
    The next step is the seasonal variations. You calculate these by going calculating the original sales of the day minus the average you just calculated.

    For Thursday in week 1 this is 1040 - 1015 = +25
    For friday in week 1 this would be 1080 - 1020 = +60
    If you do this for all the averages you calculated you find that on the Thursday the seasonal variation is +25, for Friday this is +60, for the Saturday +55, the Tuesday is then -90 and the Wednesday -50.

    Now to come to the sales of the new week, the formula in the book given is y = mx + c

    y is the forecast
    m is the daily increase of 5
    x is the number of days since the start (using the moving averages, so Thursday)
    c is 1015 which is the starting figure and the first moving average we calculated.

    This means for week 4, for the Tuesday the forecast is 13 x 5 + 1015 = 1080
    For Wednesday this is 14 x 5 + 1015 = 1085
    For Thursday this is 15 x 5 + 1015 = 1090
    For Friday this is 16 x 5 + 1015 = 1095
    For Saturday this is 17 x 5 + 1015 = 1100

    These are the figures without seasonal variations however.

    We can add those by just adding the figures we calculated as seasonal variations:

    Tuesday 1080 - 90 = 990
    Wednesday 1085 - 50 = 1035
    Thursday 1090 + 25 = 1115
    Friday 1095 + 60 = 1155
    Saturday 1100 + 55 = 1155

    I hope this helps!
  • meibaker
    meibaker Registered Posts: 481
    hi rinske:
    thanks so much for your explanation, your explanation are a lot better than the books. i am so grateful for your help! thanks again
    may x
  • Rinske
    Rinske Registered Posts: 2,453
    meibaker wrote: »
    hi rinske:
    thanks so much for your explanation, your explanation are a lot better than the books. i am so grateful for your help! thanks again
    may x
    Not so sure about that, I think the book expects you to be familiar with it and skims over it a bit.

    I was in doubt whether to post this, since the explanation looked like a lot of text again, but I also didn't see the use of posting it without workings, because then you might still get stuck as in how to get there.

    Are you studying the diploma pathway or NVQ? And do you have a provider for support or did you just buy the books?
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